Comcast (NASDAQ: CMCSA) has announced its intention to buy out General Electric’s (NYSE: GE) 49 percent share of NBCUniversal for approximately $16.7 billion. The buyout, previously scheduled to take place gradually over a 10-year period, will give Comcast full ownership of NBCUniversal. The deal is expected to close in the first quarter 2013.
Comcast is the largest cable television service provider in the United States. Also the largest residential Internet service provider, Comcast’s control of NBCUniversal’s suite of media options means that Comcast now controls 10 television and movie production studios (including Universal Pictures), 20 cable channels, two broadcast television networks (NBC and Telemundo), 11 regional broadcast TV stations, 15 Telemundo stations, nine regional sports cable networks, one regional news cable station and a host of websites, with the exclusive control to distribute all of this to its 24.2 million cable subscribers.
In addition, Comcast also controls two professional sports teams, two arenas, a food service vendor, a ticket agency and four theme parks.
Critics of Comcast’s control of NBCUniversal argue that the Comcast model will destroy the network model NBC used for decades in favor of more regional or national broadcasting options. Many believe that Comcast will effectively make NBC purely a cable channel, making NBC’s affiliate stations model obsolete and endangering local broadcasting. As argued in a presentation to the Congressional Research Service, this may be done to control a greater share of advertisers’ revenue — NBC’s only true source of revenue.
Comcast will now be able to introduce a barrier of entry to smaller media producers and media distributors. The girth of the corporation can now directly influence policy — as has been seen with another producer-distributor conglomerate, News Corporation (NASDAQ: NWS).
More pointedly, Comcast can now influence media usage fees and restrict smaller, competing media producers from access to its distribution network and produce content at a fraction of what its competitors could.
John Campbell, an assistant professor of media studies and production at Temple University, commented on the state of free competition under the Comcast model, saying, “Although this form of commercial media consolidation has been going on for decades, it has accelerated since the passage of the Telecommunications Act of 1996. As a result, we are now left with a handful for powerful transnational corporations that control the vast majority of everything we see, hear and read in the commercial media. This is completely antithetical to democracy. How can a democracy thrive when a small group of individuals – a group that consists almost exclusively of white, heterosexual, wealthy men – are able to voice their views through a growing constellation of media outlets while the rest of the American people are effectively rendered silent?”
The Telecommunication Act of 1996 struck down the limitations that restricted media ownership. Originally intended to allow cable companies to offer telephone service, the modern interpretation of the act permitted seemingly unrelated corporations to amass media interests. Today, the majority of American media is owned and controlled by the “Big Six” — Comcast, the Walt Disney Company (NYSE: DIS), News Corporation, Time Warner (NYSE: TWX), Viacom (NASDAQ: VIA) and CBS (NYSE: CBS).